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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden

UK redundancies hit record high as Covid-19 drives up unemployment – as it happened

A Job Centre Plus in London.
A Job Centre Plus in London. Photograph: Philip Toscano/PA

Closing post

Time to wrap up.

The UK suffered a record number of redundancies in the last quarter as firms cut staff in the face of the pandemic, before the government’s late u-turn to extend the furlough scheme.

Around 370,000 people were made redundant in August-October, as the second wave of Covid-19 hit the UK, leading to tighter restrictions which hurt the hospitality sector.

Business groups, and the Labour party, said the job losses were partly due to the ‘cliff-edge’ created by the planned end of the furlough scheme -- which was only extended at the end of October.

Employment also fell, while the unemployment rate rose again to 4.9% in the quarter - or 5.2% in October alone. Over 800,00 jobs have now been lost from payrolls since the pandemic began.

The pound has gained a cent, on chatter in Westminster that a UK-EU trade deal may be close....

This also lifted UK-focused company shares, although the blue-chip FTSE 100 index closed slightly lower.

Markets were also lifted by hopes that Moderna’s Covid-19 vaccine could be approved in the US soon.

But, factory growth in the US has slowed - underlining (again) the need for a new stimulus package to support the economy.

London restaurants have warned that huge amounts of food will be thrown away once the capital enters Tier 3 restrictions later this week.

West End landlord Shaftesbury has been pulled deep into the red by the pandemic too:

Pinterest has agreed to pay its former chief operating officer Françoise Brougher $20m (£15m) to settle a gender discrimination lawsuit, after she accused the online image-sharing company of marginalising, excluding and silencing female staff throughout the company.

Barclays has been fined £26m fine for treating more than 1.5 million struggling borrowers badly, prompting regulators to warn lenders to support customers properly.

Online travel agent LoveHolidays has also been rapped by regulators, and order to refund £18m to more than 40,000 customers whose trips were cancelled due to the coronavirus outbreak.

Goodnight. GW

Restaurants fear huge food waste as London and south-east head for tier 3 lockdown

Customers dining in Soho in London, today. ahead of the move into Tier 3 restrictions tomorrow which will see pubs and restaurants close once again.
Customers dining in Soho in London, today. ahead of the move into Tier 3 restrictions tomorrow which will see pubs and restaurants close once again. Photograph: Andy Rain/EPA

Fresh festive food worth millions of pounds – including whole turkeys, lobsters and truffles – could be heading for the bin as restaurants and bars in London and parts of the south-east move into tier 3 coronavirus restrictions from midnight, my colleague Rebecca Smithers reports.

Under the tough new rules in England, hospitality venues have been ordered to close their doors – and cancel lucrative Christmas bookings – although they are allowed to offer limited takeaway food and delivery boxes.

On the eve of the sector’s busiest and most profitable week of the year, restaurant owners, managers and chefs have complained of “a kick in the teeth” by the government.

After serving up what is being called the “the last supper” on Wednesday, restaurants will be vacuum-packing fresh food and scouring their freezers for space, while sending surplus food home with staff or to local charities and food banks.....

Optimism over the UK-EU trade talks, vaccines, US stimulus talks and politics all created a bullish mood today, says David Madden of CMC Markets

Micheál Martin, the Irish premier, said that he has greater hope for a UK-EU trade deal this week. The situation has yet to be resolved but it seems that things are heading in the right direction....

It is looking more likely that there will be a smooth transition of power from President Trump to President-Elect Joe Biden in January as the US Electoral College confirmed the Biden victory. Mitch McConnell, the Senate Majority leader, acknowledged the Biden win so that should help pave the way for the Democrat to move in to the white house in January.

As a results, European markets have closed higher, with Germany’s DAX ending the day up over 1%.

European stock markets, December 15

FTSE 100 close

Britain’s FTSE 100 has closed for the night, down 18 points or 0.28% at 6513, amid that late buzz of optimism over the Brexit talks.

The stronger pound pulled the index lower, weighing on multinationals such as pharmaceuticals firms Hikma (-2.7%) and GlaxosmithKline (-2.5%), and consumer goods maker Reckitt Benckiser (-2%).

UK-focused companies ended the day high, though, housebuilder Persimmon (+2.7%) and Lloyds Bank (+2.5%) in the risers column.

JD Sports also rallied (+3%) after it announced plans to acquire US retailer Shoe Palace.

The smaller FTSE 250 index, which has more of a domestic focus, gained almost 0.5% today.

Pound pushes higher on Brexit deal 'buzz'

The pound just pushed higher, after Newsnight’s Nicholas Watt tweeted that there’s a ‘Big buzz in the last hour’ among Conservative MPs that the UK is heading towards a Brexit trade deal with the EU.

This has sent the pound up over a cent today to $1.344 (up 0.9%).

That takes sterling back to the highest level seen during Monday’s rally, after the UK and EU agreed to keep negotiating on Sunday.

The pound vs the US dollar this month
The pound vs the US dollar this month Photograph: Refinitiv

But, sterling is still below the 30-month highs over $1.35 seen earlier this month, when optimism about a deal was also rising.

John Caudwell, the entrepreneur-turned-philanthropist who founded Phones4U, fear the UK unemployment total will hit 3m next year - once the furlough scheme ends.

He’s pushing for a new stimulus plan, based on the government borrowing £500bn and £1trn.

It would invest in - among other things - a Silicon Valley for renewable energy, massive infrastructure like internet, roads, rail, shipping, housing and hospitals, and a new apprenticeship programme that would give young people five-year placements with leading businesses across all sectors.

Back in the UK, the NIESR thinktank has predicted that 2020 will be the worst year for total pay growth since 2009.

Having analysed this morning’s unemployment figures, NIESR senior economist Cyrille Lenoël predicts that pay growth will falter this quarter, as England’s November lockdown forces more companies to furlough staff.

Pay freeze for a large part of the labour force, in addition to lost income during the time spent in furlough have put more strain on the labour market than the modest rise in unemployment suggests. Even with rollout of an effective COVID-19 vaccine, the recovery in the labour market will take time”.

Here’s the details:

  • According to ONS statistics published this morning, average weekly earnings, including bonuses (AWE), were 2.7 per cent in the three months to October and 1.9 per cent in real terms in Great Britain.
  • Average pay growth was largest in the finance and businesses sector at 4.6 per cent and lowest in the construction sector at -2.2 per cent.
  • The recently announced pay freeze for half of public sector workers will reduce the growth rate of public sector pay that has been growing faster than private sector pay since the beginning of the pandemic.
  • The November lockdown in England and continued uncertainty regarding the pandemic has put downward pressure on private sector pay as the number of furloughed workers probably increased for the first time since April.
  • The National Living Wage will increase by 2.2 per cent to £8.91 an hour from April 2021 in line with the Low Pay Commission’s recommendation.
  • We forecast average weekly earnings including bonuses to increase by 1.0 per cent in the fourth quarter of 2020.

Wall Street has opened higher, with the Dow Jones industrial average rising back over the 30k mark (which it smashed through last month for the first time).

The Dow has gained 177 points or 0.6% to 30,038, points amid hopes that a stimulus package could finally be agreed soon.

The news that Moderna’s Covid-19 vaccine was moving closer to being approved also helped with the mood.

Stocks fell in New York yesterday, but are now recovering - as Edward Moya of OANDA explains:

Inevitable lockdowns should be the needle that breaks the stimulus stalemate’s back. Congress will have to vote on two bills before the end of the week.

The first is a $748bn package that is mostly agreed upon covers additional unemployment benefits, rent assistance, and the extension of PPP. The second bill has all the sticking points, liability protection for businesses and aid for state and local governments. The government avoided a shutdown last week with a temporary funding bill that expires on December 18th. Optimism is fairly high something will get done since Democrats seem willing to drop state and local aid for now.

Growth across America’s factory sector slowed last month.

The Federal Reserve reports that industrial output rose by 0.4% in November, down from 0.9% in October, while the narrower manufacturing output measure rose by 0.8%, down from 1.1% in October.

Economists had expected manufacturing output growth to slow to just 0.3%, so this is better than expected - but still signals the economic recovery may be slowing.

Vaccine news: Moderna’s Covid-19 vaccine has moved another crucial step closer to being authorised for emergency use in the US.

Staff of the Food and Drug Administration have reported that a two-dose regimen of Moderna’s vaccine was highly effective , and also didn’t flag any specific safety issues.

These comments were made in a report for a group of outside medical advisors, the FDA’s Vaccines and Related Biological Products Advisory Committee. They are scheduled to review Moderna’s vaccine later this week, and decide whether or not to approve it.

This could give stocks a lift on Wall Street, given the urgent need for vaccines to combat America’s pandemic.

Barclays bank building is seen at Canary Wharf
Barclays bank building at Canary Wharf Photograph: Stefan Wermuth/Reuters

UK bank Barclays has been fined £26m for treating more than 1.5 million struggling borrowers badly.

The case has also prompting the City regulator to warn lenders not to mistreat other customers facing financial hardship during the Covid crisis -- a timely warning, given the surge of job losses this year.

My colleague Kalyeena Makortoff has the details:

Barclays was found to have mistreated business and personal customers who were in financial difficulties and fell behind on credit card and loan payments between 2014 and 2018. The Financial Conduct Authority (FCA) said the bank failed to properly contact customers who fell into arrears and did not have appropriate conversations about their individual circumstances.

It meant the bank ended up offering struggling borrowers unaffordable or unsustainable payment plans that could put them under pressure to prioritise their Barclays debt over other key financial responsibilities such as their mortgage, council tax, child support or utility bills.

In the markets, the pound has risen today amid hopes of a Brexit trade deal, after the UK and EU agreed on Sunday to keep negotiating.

Sterling is currently up over half a cent at $1.339, after a strong Monday which saw it soar by over two cents to $1.344, and then fall back somewhat.

The pound had climbed steadily through the morning, but briefly dipped back after reports that Boris Johnson had told his cabinet team that no-deal was still the most likely scenario.

According to Reuters, the PM’s spokesman told reporters:

“The prime minister made clear that not being able to reach an agreement and ending the transition period on Australia-style terms remained the most likely outcome but committed to continuing to negotiate on the remaining areas of disagreement.”

The pound vs the US dollar this week
The pound vs the US dollar this week Photograph: Refinitiv

But Irish Foreign Minister Simon Coveney has told national broadcaster RTE that slow progress is being made, pushing sterling a little higher again.

“I think what we’re seeing this week, having had a number of stalls in this process, is slow, but at the same time some, progress,”

“My understanding is we’re making some progress in that area (the level playing field). I think you can take it that because negotiating teams have gone really quiet here, that’s an indication to me that there is a serious if difficult negotiation continuing. I’m still hopeful that can result in a successful outcome agreement.”

Updated

In other news... LoveHolidays, one of the UK’s biggest online travel agents, has been ordered to refund £18m to more than 40,000 customers after their trips were cancelled due to the coronavirus outbreak.

Competition watchdog the CMA took action after hundreds of customers reported that they’d asked for a refund, but were told they would only get money back for their flights once the firm had received refunds from the airlines.

But that’s not allowed, as my colleague Julia Kollewe explains:

Online travel agents are legally bound to refund customers for package holidays cancelled due to coronavirus, regardless of whether or not the agent has received money back from suppliers, such as airlines.

LoveHolidays has now signed formal commitments that ensure customers get a full refund. More than £18m will be refunded to 44,000 customers. Of this, so far £7m has been returned to 20,000 customers.

The company and another large online agent, On the Beach, left the Association of British Travel Agents in September following disputes over customer refunds. LoveHolidays, which is licensed to carry 1.1 million passengers a year, said then that the package holiday regulations, which oblige companies to issue a refund within 14 days, had not been designed to deal with disruption on the scale since March.

The watchdog has accepted LoveHolidays’ commitment to repay customers in full by the end of March at the latest, after reviewing the firm’s financial information.

Updated

Could the surge in redundancies this year lead to a similar surge in claims for wrongful dismissal in 2021?

Julian Cox, employment law specialist and partner at law firm BLM, suggests that some companies may not have followed the proper procedures, following the shock of the pandemic.

“Even with furlough payments still available until March, today’s ONS figures show how the pandemic has played havoc with so many people’s livelihoods. With much of the country in, or about to enter, tier three, these restrictions will only cause further devastation as staffing requirements continue to see a downward trend, particularly in the hospitality and retail sectors.

“There’s a worry that a rapid rise in unemployment could indicate many businesses may need to consider restructuring or be at risk of insolvency. There’s also a concern over whether some businesses, who felt they have had to act swiftly to address their staffing levels to ensure survival, have handled redundancies and dismissals fairly, following proper procedures.

“As a result, we could be facing a wave of unfair dismissal and employment tribunal claims in 2021, which can attract liability for loss of earnings of £88,512 or 52 weeks gross salary currently. It has the potential to cause further damage to a business’ bottom line as they attempt to recoup the losses of this year, so seeking specialist legal support before embarking on staffing reviews is vital.”

Resolution have now done a very comprehensive Twitter thread about this morning’s unemployment report:

A quiet street in China town, in London, during last month’s lockdown.
A quiet street in China town, in London, during last month’s lockdown. Photograph: Kirsty O’Connor/PA

The pandemic has also hurt West End landlord Shaftesbury badly.

Shaftesbury, which owns properties across London’s Chinatown, Carnaby Street and Seven Dials, has posted a £699.5m loss for the 12 months to the end of September.

The slump in tourists to the capital this year, and in workers commuting to the office, has hit Shaftesbury’s tenants such as shops, pubs and restaurants badly. That has driven down its rental income, and forced Shaftesbury to slash the value of its property assets by over 18% to £3.1bn (leading to today’s loss).

The company has only collected 53% of contracted rent for the six months to September, with 34% deferred or waived and 13% outstanding.

Brian Bickell, chief executive, explains:

The pandemic has had a significant impact on our performance, particularly during the second half of the financial year, depriving our hospitality and retail occupiers of footfall and trade and resulting in reduced rent collections, increased vacancy, reduced occupier demand and a fall in property valuations.

Our key priority has been, and continues to be, supporting our occupiers through this period of disruption.

During the last two months (to 30 November), rental collection rates fell to just 37% with 40% waived, which shows the impact of England’s November lockdown.

Rent collection rates have varied by use, with residential and office collections being higher than those for food, beverage and retail businesses which inevitably are more footfall reliant.

A shopper wearing a face mask in Carnaby Street, London, earlier this month.
A shopper wearing a face mask in Carnaby Street, London, earlier this month. Photograph: Victoria Jones/PA

Shaftesbury adds that London’s move into tier-3 restrictions tomorrow will have an adverse impact on its hospitality and retail tenants’ ability to trade, and thus pay their rent (as hospitality businesses must close other than for takeaway or home delivery service).

The FT has more details:

Restaurants on the estate had bought enough stock to see them through the festive season — some stockpiling in anticipation of supply chain disruption caused by Brexit.

“A lot of that is just going to have to be thrown away,” said Mr Bickell, who anticipates that Shaftesbury will have to keep supporting its tenants until next September.

More here:

Updated

Full story: UK redundancies rise to record high amid second Covid-19 wave

The number of people being made redundant in the UK soared to a record high in October amid the second coronavirus wave and as the government scaled back its furlough scheme before an 11th hour extension, my colleague Richard Partington writes.

The Office for National Statistics said redundancies rose to 370,000 in the three months to October, fuelled by job losses in retail and hospitality, during a period when the flagship wage subsidy scheme became less generous and was due to close at the end of the month.

However, the government staged a last-minute U-turn to extend the scheme until the end of March, as rapid growth in coronavirus infections led Boris Johnson to impose a second national lockdown in England from November and as tougher controls were used in Scotland, Wales and Northern Ireland.

The ONS said the 217,000 quarterly increase in redundancies was unprecedented and pushed up the headline UK unemployment rate to 4.9%, up slightly from 4.8% in the three months to September.

In a reflection of the devastating impact of the pandemic on the jobs market, the latest figures from HMRC showed there were 820,000 fewer employees recorded on company payrolls in November than in February before the pandemic struck, with more than a third of the reduction coming from the hospitality sector.

However, while the number of people being made redundant hit a fresh record, the ONS said there were signs the pace of job cutting eased towards the end of October.

According to a survey of company bosses by the statistics agency, 7% of businesses surveyed between 19 October and 1 November planned to make redundancies within the next three months, compared with 9% in a survey between 5 and 18 October.

More here:

More than half of furloughed jobs in the UK are at the highest risk of automation as the Covid crisis accelerates workplace technology change, driving up redundancies and inequality across the country, according to a report published today.

The two-year commission on workers and technology, chaired by the Labour MP Yvette Cooper, found that workers in sectors hit hardest by the pandemic – such as hospitality, leisure and retail – face a “double whammy” as their jobs are at the most risk of being replaced by machines.

Anneliese Dodds: Winding down furlough scheme drove job losses

Anneliese Dodds MP, Labour’s shadow chancellor, has blamed the record level of redundancies this autumn on Rishi Sunak’s ‘irresponsible decisions’ which created a furlough scheme ‘cliff edge’ this autumn.

Dodds says that winding down the furlough scheme during September and October put businesses under pressure.

It forced some to cut staff whose pay had previously been covered by the government (at up to 80% of unworked hours, capped at £2,500 per month), she says, contributing to the 370,000 redundancies in the August-October quarter.

Waiting until the end of October to extend the Coronavirus Job Retention Scheme into December (before again extending it until next spring [as explained earlier]) also cost jobs, Dodds adds:

“It’s no coincidence that redundancies rocketed to record levels when the clock was ticking down to the Chancellor’s furlough cliff edge and rising employer contributions were putting businesses under pressure.

“The Chancellor’s irresponsible decisions haven’t just cost jobs - they’ve left us in the worst recession of any major economy. It was his decision to wind down the furlough scheme before we were out of this crisis, and his decision to wait until the last possible minute to change course.

[reminder: in September firms had to pay 10% of furloughed staff’s normal pay, rising to 20% in October, with the government’s contribution dropping to 70%, then 60%].

That was a blow to hospitality firms, who suffered from the table-service only rules and the 10pm curfew introduced in September, and then the tier 3 restrictions imposed on swathes of Northern England in October.

Dodds also reminds us that the government is due to review the Job Retention Scheme at the end of January, even though the scheme has been extended to March 31.

She fears that this will create a new cliff-edge early in the new year, if companies fear that they may have to start contributing again [currently, the government will pay the full 80% of unworked hours].

“He can’t put people through the wringer like this again. Employers can’t afford to wait until the last minute again for this Chancellor to decide what happens to the furlough scheme at the end of January. They need clarity now.”

Updated

Poorest families are suffering the brunt of the pandemic job losses, points out Rebecca McDonald, senior economist at Joseph Rowntree Foundation:

That’s because workers in the sectors worst affected (hospitality, accommodation) were already relatively poorly paid, so some would already have been in poverty before the pandemic.

This shows that the chancellor must extend the temporary £20 per week increase to universal credit. McDonald tweets:

Back in February, the JRF showed that poverty among working family has hit a record high; 56% of people living in poverty in 2018 were in a household where at least one person had a job.

In a further blow, the number of people on company payrolls kept falling in November.

The ONS’s early flash estimate suggest that the number of payrolled workers fell by around 28,000 last month, when England was in lockdown, there were curbs in Scotland, and Wales was emerging from a firebreak.

UK payroll totals
UK payroll totals Photograph: ONS

That’s a drop of 0.1% compared to October [taking the total of employees down to around 28.195m].

As flagged in the introduction, around 819,000 fewer people are now in payrolled employment than when the pandemic began in February, or 781,000 less than a year ago. That’s a clear sign of the economic pain suffered this year.

Resolution: Unemployment will keep rising in new year

Nye Cominetti, senior economist at the Resolution Foundation, fears that unemployment will keep rising into 2021... even though the furlough scheme has prevented wider job losses.

“The labour market continued to deteriorate as infections grew – and restriction increased – in the run-up to the second lockdown. Hospitality continues to be worst affected by Britain’s jobs crisis.”

“The extension of jobs support schemes will have protected millions of jobs and kept a lid on rising unemployment over the winter. But with vacancies still a third down on pre-crisis, and significant social distancing restrictions likely to be required well into 2021, unemployment will continue to rise in the new year.

“The labour market priority for 2021 should be to support jobs creation, and maintain the stronger safety net for those who are struggling to find work.”

Unemployment hits 5.2% in October alone

Today’s jobs report also shows that unemployment climbed during the last quarter.

In October alone, the ONS estimates that the UK jobless rate hit 5.2%, up from 4.9% in September, 4.8% in August, and 4.6% back in July.

These single-month figures are more volatile than the quarterly figures (showing a rise to 4.9% in Aug-Oct), so should be used with some caution.

But, this chart shows pretty clearly that job losses mounted during the autumn, as local restrictions were imposed in parts of the country and firms anticipated the end of the now-revived furlough scheme.

UK unemployment, single month
UK unemployment, single month Photograph: ONS

As Reuters puts it:

For much of the period covered by Tuesday’s data, finance minister Rishi Sunak rejected calls to extend his broad job retention scheme beyond a scheduled October 31 expiry, raising fears of an acceleration in job losses.

But, as a second wave coronavirus cases hit the country, Sunak was forced to announce a last-minute, one-month extension of the scheme, which he quickly extended again until the end of March 2021.

Economist Julian Jessop tweets:

Although vacancies have picked up from their spring slump, there are much fewer opportunities for work than before the pandemic.

The ONS estimates there were 547,000 vacancies in September to November - a quarterly increase of 110,000 vacancies, and 203,000 more than the record low in April to June 2020.

But it’s still 31% less than a year ago, when there were nearly 800,000 jobs available:

dec15vacancies1

TUC General Secretary Frances O’Grady says the government must provide more support to people in jobs, and boost the benefits available to those who are out of work.

“We are staring down the barrel of mass unemployment. There’s no time left to waste.

“Ministers must step up and create jobs. We could create 1.8 million new jobs in the next two years in green transport and infrastructure, and by unlocking public sector vacancies.

“Confusion around the future of the furlough scheme means many workers are losing their jobs unnecessarily. We need a guarantee that support will continue.

“And people who have lost their jobs must get the support they need to make ends meet. We need an urgent boost to universal credit or many face being plunged into poverty.”

Currently, the temporary £20 per week increase in UC will end in April, which would cost families up to £1,000 per year.

IoD: Unwinding furlough scheme pushed up job losses

Tej Parikh, chief economist at the Institute of Directors, also blames the government’s plan to unwind the furlough scheme over the autumn (before that early November u-turn), just as the second wave of Covid-19 struck.

He says:

“The pandemic took its toll on the jobs market in the Autumn.

“The unwinding of the Job Retention Scheme pushed up redundancies as firms struggled amid Covid-19 restrictions. The subsequent extension of furloughing will provide a lifeline for many jobs over the difficult winter months, but the big question is what happens after.

The job retention scheme did become progressively less generous to employers over the summer, ahead of its planned ending in October. The government’s contribution to furloughed workers dropped to 70% of wages in September, then 60% in October (with firms having to top pay packets up to 80%, as well as picking up national insurance and pension contributions again from August).

That was based on the notion that firms would have more work because the UK was emerging from the pandemic, not plunging into a second wave.

Parikh also fears that firms could face a new cliff edge when the furlough scheme (which is now paying 80% of wages) ends on 31 March.

“While the roll-out of the vaccine has buoyed employers, it won’t automatically undo the damage done to their businesses by the pandemic. Hiring plans for next year remain stuck in neutral with many firms needing to tend to damaged balance sheets. To avoid a further uptick in unemployment at the end of Q1, the Treasury should consider measures to encourage job creation.

“A relief for employers’ national insurance contributions for example could ease cashflow difficulties and put the jobs market in a stronger position come the end of the furlough scheme. It’s crucial that March doesn’t become another cliff-edge, business leaders have already seen far too many of those of late.

Updated

Employment minister: There's hope on the horizon

Minister for Employment Mims Davies MP says:

“It’s been a truly challenging year for many families but with a vaccine beginning to roll out with more perhaps to follow and the number of job vacancies increasing there is hope on the horizon for 2021.

“Our Plan for Jobs is already helping people of all ages into work right across the UK, with increased Jobcentre support, new retraining schemes, new job placements like Kickstart for our young people and more to come as we are determined to build back better.”

BCC: Furlough cliff edge drove redundancies up

The surge in redundancies in August to October shows that companies were cutting staff because they expected the furlough scheme to end, before chancellor Rishi Sunak eventually extended it into March 2021.

The Job Retention Scheme (which covered up to 80% of the wages of furloughed workers) had been due to finish at the end of October, and be replaced by the less generous Job Support Scheme.

Under the JSS, firms had to bring staff back on at least 33% of usual hours to get support (with the government and the employer each paying a third of the wages shortfall). That was little help for companies whose business had dried up due to the pandemic.

As the second-wave of Covid-19 mounted in October, forcing more local restrictions to be imposed, the JSS was made more generous.

Then on the last day of October, the furlough scheme was extended until December.... following warnings that rising infections could force new lockdown measures to be imposed.

But it took until early November for the government to pull a major u-turn, and continue to pay 80% of temporarily laid-off workers’ wages until 31 March.

BCC head of economics Suren Thiru says the threat of a ‘cliff edge’ forced companies to lay off staff:

“The latest data confirms that coronavirus continues to weigh heavily on the UK labour market. The re-introduction of tighter restrictions and the expected cliff edge caused by the original furlough scheme end date in October helped drive record redundancies.

“While the furlough scheme will help safeguard many jobs over the winter months, with businesses facing the prospect of further restrictions and a messy end to the Brexit transition period, major job losses remain probable in the near term.

Ruth Gregory of Capital Economics agrees, saying:

The rise in the unemployment rate from 4.8% in September to 4.9% in October suggests that the previous phasing out of the furlough scheme continued to take a gradual toll, which will continue over the coming months.

Updated

Matthew Percival, CBI Director of People and Skills, says:

“Another bleak set of figures this month, with a steep rise in unemployment and more redundancies showing households were still being hit hard, even ahead of England’s second national lockdown.

“While news of a vaccine has provided hope, many firms are still finding it difficult to operate within the toughest Covid restrictions.

“With millions more expected to be living under the toughest tier before the end of the week, the Government must continue to do what it can to help businesses get through winter.”

Darren Morgan, the ONS’s director of economic statistics, says today’s data show a ‘further weakening’ in the UK labour market, with hospitality hit particularly hard:

UK unemployment, to October 2020

Here’s Sky’s Ed Conway on the jump in redundancies:

Alex Collinson of the TUC has more details on the surge in redundancies:

UK redundancies at record as Covid-19 hits employment

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Britain’s jobs crisis has worsened, as companies continue to lay people off as the Covid-19 pandemic hits the economy.

Figures just released by the Office for National Statistics show that the UK unemployment rate rose to 4.9% in the three months to October, up from 4.8% a month earlier.

Although that’s a smaller rise than economists expected, it’s still 1.2 percentage points higher than a year earlier and 0.7 percentage points higher than the previous quarter.

The ONS says:

August to October 2020 estimates show a large increase in the unemployment rate and a record number of redundancies, while the employment rate continues to fall.

The ONS reports that around 1.69 million people were unemployed in the August-October period, an increase of 241,000 on the previous quarter -- and 411,000 more than a year ago.

Today’s labour market report also shows that there were 32.52 million people aged 16 years and over in employment during the quarter -- 280,000 fewer than a year earlier.

This was the largest annual decrease since January to March 2010.

Employment decreased by 144,000 on the quarter, the ONS says, adding:

This quarterly decrease was mainly driven by men in employment, the self-employed and part-time workers, but was partly offset by an increase in full-time employees.

UK employment chart

The number of people being made redundant has also hit a new record high, reaching 370,000 in the August-October quarter.

That’s a record increase compared to the previous three months, although the pace of layoffs did slow in October:

UK redundancies to October 2020
UK redundancies to October 2020 Photograph: ONS

In another sign of the impact of the pandemic, the ONS reports that the number of people on company payrolls has fallen by 819,000 since February.

The figures come a day after the House of Lords economic affairs committee warned that the UK “sleepwalking into an unemployment crisis”, and that urgent action was needed to repair the welfare system, create new jobs and help train people learn new skills.

More details and reaction to follow...

Updated

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Khloe Kardashian feared Lamar Odom reality show could 'jeopardise family brand'
Khloe Kardashian feared Khloe and Lamar could "jeopardise the family brand" but her then-husband pushed for the show.
BANG Premier
BANG Premier
“I laughed my head off! Like, ‘Oh my God, what have we spawned?’” Keith Richards shares his response to the Sunset Strip shredders of the 1980s
Richards never had any interest in becoming a lead player – and the early innovators of the shred movement did not change his mind
Guitar World
Guitar World
“A few years ago, I decided, ‘I'm just going to play trumpet every day, no matter what. And after a couple of years of doing it, I'm going to make a record’”: Flea covers Frank Ocean and explains why he’s scratching a long-standing itch on his new album
Watch him doing double duty on trumpet and bass in the company of Jimmy Fallon
MusicRadar
MusicRadar
Anna Kendrick And Kieran Culkin’s Reactions To An Interviewer’s Michael Cera Comment Are Going Viral Again
“I think the interview is projecting his own insecurities here.”
Bored Panda
Bored Panda
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